World View & Market Commentary. Forest first; Trees second. Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.

Sunday, March 22, 2009

The General is sharing his best battlemaps again, most Generals aren’t so nice with their intel, while most in the financial industry would charge you a fortune just to see them!

Some of the battlemaps I'll be watching most closely heading into next week… My favorite look right now is the RUT. The dueling morning stars and evening stars is a pattern we have seen throughout this bear in different sectors and indices. The pattern is a little more obvious on IWM or TNA. These dueling stars usually resolve in battle around the mid point between the opposing patterns that can last a few days. Guess which side usually wins? A close over the wave 5 channel and 800 still remains the key battle line. The bears control the momentum in the medium term for as long as they hold that trench.

Note how the ES includes a more bullish interpretation of the primary yellow wave 4 or new wave 1 channel. I think this is the alternate with the flatter retrace on the SPX and RUT retrace being more likely.

On bonds, so far we have a FAIL for BB's attempt to break the 55 day. That pattern of shrinking pins the past 3 days has a Japanese Candlestick name that I can't recall, but it's not bullish. That said I am going to bail on a breakout and close above the 55 day. My divisions there already took a beating and anymore bond bullishness and it will be time to bring them home to rehabilitate them in safer trades.

- DoctorMad

Wow, Doc, love the charts, especially the RUT showing the “Stars.” The bond chart looks frightening, I think Bernanke is going to have problems breaking that down channel, but we’ll see. I agree it would be the best thing for America for the bond market to call him on his money pumping.